Kaena, miners on a further gold rally & the HUI
Looks like we saw a momentum peak yesterday. Hard breaks seen in some cases, today, including RANGY.
Dollar gets over 94.11 and I'd say it's curtains for PMs for a while. Based on today's action I'm not counting on the miners to hold up if GOLD comes under the least amount of further pressure. The broader investing populace doesn't believe in them. On a valuation basis they aren't real attractive .....HIGH PEs, no dividends, on going and in some cases large capital requirements, share issues, depleting assets, little if any street promotion. And speculators have too often been burned to hang around long once momentum wanes . Sure that's the recipe for a bottom, when nobody wants something; problem is we're not at a bottom....we're slightly over extended. I'm concerned, having witnessed some of it already today, that a shakeout if it starts or even extends past a one day event will be quite violent. This is not the S&P with institutional and government policy help. Going down from here to the long-term holders, the believers, no, won't make any sense given the fundamental backdrop with which we are familiar, but then Mr. Market doesn't care or need to make sense.... We'll need $400 gold to get the HUI to its old highs. And I think the odds of that now before late fall, if then, are less than 20%.
HUI - technical damage done today - fact that it did hold yesterday's low is encouraging....that goes tomorrow and "laying low for a while" will be the prescription, indeed. Ultimate Oss is quite divergent to price.
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USD - bottoming characteristics shaping up.....see improving Ultimate Oss, usually one of the first indicators to "shape up" .
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As to what other shares will do well if GOLD goes to $400, Kaena....I suspect the vast majority of them will, if and when such should happen. Rangy and GSS I think will be among the better performers outside the penny (flip a coin, get lucky) arena. There I am no expert and increasing less interested. (Let that be a bullish contrarian indicator for you, or not). I have my flock of fledgling aspirants I thought based on some DD were headed for greatness, and probably in the long term one or two of them will attain some semblance of same, but unlike RANGY and GSS there's nothing I see going in with their price action of news streams to recommend them...My advice to me....stick primarily with the more liquid, best performing, American exchange listed, issues and sell on strength for God's sake, especially when Soros so kindly lets us in on his market position.. |
